Suppose That a Market Is Initially in Equilibrium $P = 90 - Q ^ { d }$

question 83

Multiple Choice

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. What is the change in producer surplus due to the tax?

• A) \(\$ 900\).
• B) \(\$ 841\).
• C) \(\$ 59\).
• D) \(\$ 29.50\).

---

Definitions:

Overhead Volume Variance

The difference between the budgeted overhead based on standard hours allowed and the actual overhead incurred, due to differences in activity levels.

Unfavorable Labor Efficiency Variance

A financial term indicating that the actual labor time to produce goods or services was higher than the budgeted or standard labor time, resulting in increased costs.

Variance Report

A document that compares planned financial outcomes to actual financial outcomes, highlighting differences (variances) for analysis.

Materials Costs

These are the costs associated with the raw materials used in the manufacture of products or the provision of services.